Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Alkermes Makes Financial Progress as Its Pipeline Moves Forward

By Brian Feroldi - Oct 24, 2018 at 1:46PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Upbeat quarterly results enable management to boost guidance for the full year.

Alkermes ( ALKS -0.32% ) reported its third-quarter results on Wednesday. Double-digit sales growth of the company's propriety products helped drive an outsized gain on the bottom line. 

DOllar signs in a drug packet

Image source: Getty Images.

Alkermes' third-quarter results: The raw numbers

Metric Q3 2018 Q3 2017 Change (YOY)
Revenue $248.7 million $217.4 million 14%
GAAP net income ($34.4 million) ($36.3 million) N/A
Non-GAAP net income $11.6 million $4.2 million 176%
Non-GAAP earnings per share $0.07 $0.03 133%

Data source: Alkermes. GAAP = generally accepted accounting principles. YOY = year over year.

What happened with Alkermes this quarter?

  • Sales of opioid and alcohol-dependence drug Vivitrol rose 15% to $79.9 million. 
  • Sales of schizophrenia drug Aristada increased 48% to $36.1 million. The boost was partially attributable to the recent launch of Aristada Intio, which is a drug that helps people get started with Aristada.
  • Total manufacturing and royalty revenue across key product lines dropped 3% to $97.5 million. 
  • Research and development revenue -- the bulk of which is attributable to its partnership deal with Biogen ( BIIB -2.01% ) -- was $16.3 million. 
  • GAAP operating expenses increased 11% to $286 million. 

What management had to say

CFO James Frates commented on what drove the company's growth:

Our solid results in the quarter were in-line with expectations, driven by the growth of our proprietary commercial products, the continued strength of our royalty and manufacturing business, and the important investments we are making in our late-stage pipeline and commercial organization. Our diverse business is financially strong and we are well positioned to execute on our strategy to drive value and long-term growth.

CEO Richard Pops also updated investors on the company's pipelines and upcoming milestones:

Against the backdrop of the highly anticipated upcoming regulatory interactions for ALKS 5461 for the adjunctive treatment of major depressive disorder and the ALKS 3831 ENLIGHTEN-2 pivotal study data in schizophrenia, we continue to make important progress across our other pipeline assets. BIIB098 for multiple sclerosis is on track for NDA submission by year-end, and ALKS 4230, our immuno-oncology program, is gaining momentum, highlighted by the recent initiation of combination therapy evaluation.

Looking forward

The continued progress allowed management to favorably increase its guidance for the full-year 2018:

  • Revenue is expected to land between $1.015 billion to $1.045 billion. This is a small increase from its previous call for total revenue of about $1 billion.
  • On a GAAP basis, the net loss is expected to land between $180 million and $210 million, or $1.16 to $1.35 per share. This is down from its prior call for a loss of $1.35 to $1.55 per share.
  • Non-GAAP net income is expected to land between $20 million and $50 million, or $0.12 to $0.31. This is also an improvement from its prior call for a non-GAAP EPS between a $0.06 loss and $0.13 gain.

As usual, CEO Richard Pops ended his remarks by reaffirming his optimism about the long-term potential of the company: 

Our results this quarter demonstrate the strong and resilient company we have carefully built over the years, with important medicines driving an expected top line in excess of $1 billion and a diverse development portfolio of late-stage product candidates, each with the potential to impact the practice of medicine and change the growth trajectory of the company. As we head into the fourth quarter, the business is well positioned for growth and the opportunities ahead.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alkermes plc Stock Quote
Alkermes plc
ALKS
$22.04 (-0.32%) $0.07
Biogen Inc. Stock Quote
Biogen Inc.
BIIB
$223.92 (-2.01%) $-4.60

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.